Founded on January 2018, CV Capital is a Sydney based private investment vehicle established to create wealth for our shareholders by compounding capital at superior risk adjusted returns over a long time horizon.
Core Principles
- Total integrity
We strive to create a circle of trust between the manager and investors and pride ourselves in managing the fund and dealing with our shareholders with total and complete integrity.
- Alignment of interest between the manager and investors
We believe a fund manager should “eat his own cooking”. At CV Capital, the manager has the majority of his investible assets invested in the fund.
- Compounding over a long time horizon
Albert Einstein allegedly said that compound interest is the eighth wonder of the world, we fully agree. Consistent returns compounded over a long time horizon produces exceptional results.
- A fair fee structure
We don’t believe in a management fee structure purely based on funds under management. We believe in a fee structure which creates the right incentives for the manager to perform and remunerates the manager upon satisfactory results.
Investment Philosophy
We are value investors. We look for securities that are being sold at market prices significantly lower than our analysis of their intrinsic values. We focus our efforts on the following areas:
- Less competitive areas of the market: small caps, less liquid stocks and overseas markets with less sophisticated market participants.
- Dominant companies in small markets.
- Undervalued conglomerates.
- Markets with negative investor sentiment, unloved sectors.
- Arbitrage opportunities.
We have a laser focus on risk, so we prefer companies with a proven track record. We rarely buy companies with no cash flow. Our preferred investment is an unregulated monopoly with a long runway of growth.
Focus on Cash Flow
We have no ability to predict short term market prices. When analysing a potential investment, we focus on the shareholder returns being generated from the business cash flow over the long run. We measure success by purchasing a security below its intrinsic value and correctly predicting its future growing cash flows. We are least concerned about short term market price fluctuations.
Time Horizon
We invest for the long term. Our preferred holding period is decades.
Diversification
We run a concentrated portfolio where 5-10 positions make up the majority of our portfolio value. For risk management purposes, we have a 30% allocation ceiling for any investment based on initial cost.
Fee Structure
We charge a performance based fee dependent on beating our benchmark, Statestreet’s ASX 200 ETF (ticker:STW). There are no management fees.
Talk To Us
Email: darrell@cvcapital.com.au